SKN | Better and Coinbase Launch Bitcoin-Backed Mortgages as Crypto Enters US Home Financing

• Better Mortgage and Coinbase have launched a Bitcoin-backed mortgage product that allows US homebuyers to use BTC as collateral for a down payment without selling their holdings.
• Borrowers must pledge Bitcoin worth at least 250% of the down payment loan, with the assets held through Better’s custodial account on Coinbase Prime.
• The product arrives as US housing finance gradually incorporates digital assets into mortgage underwriting, but Bitcoin volatility and liquidation risk remain important considerations.

Better Mortgage and Coinbase have expanded the role of Bitcoin in US housing finance with the general availability of a mortgage product that allows homebuyers to use BTC as collateral rather than selling it to fund a down payment. The structure gives cryptocurrency holders a way to access housing capital while retaining exposure to Bitcoin, but introduces a second layer of borrowing and collateral risk into the home-buying process.

The product combines a Fannie Mae-backed mortgage with a separate down payment loan secured by Bitcoin, according to Coinbase. The model effectively allows eligible borrowers to monetize part of their crypto holdings without converting the underlying asset into dollars.

Bitcoin Serves as Down Payment Collateral

Under the structure, borrowers must pledge Bitcoin worth at least 250% of the down payment loan. The pledged BTC is transferred to a custodial account operated by Better through Coinbase Prime.

The two loans carry the same interest rate and amortization period and are repaid through a single monthly payment. Once the mortgage is fully repaid or refinanced, the pledged Bitcoin can be returned, subject to the applicable loan terms.

One notable feature is that ordinary Bitcoin price declines do not automatically trigger margin calls or changes to the mortgage terms. However, the collateral is not completely insulated from downside risk.

Coinbase says Better can liquidate the pledged Bitcoin if the borrower becomes 60 days delinquent on payments. This means borrowers remain exposed to the possibility that a financial problem could force the sale of Bitcoin, potentially at an unfavorable market price.

Crypto Moves Deeper Into Mortgage Underwriting

The Better-Coinbase launch follows broader efforts to determine how digital assets can be incorporated into the US mortgage system.

In June 2025, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to develop proposals for considering cryptocurrency held on US-regulated centralized exchanges as an asset in single-family mortgage risk assessments without requiring borrowers to first convert it into US dollars.

The directive also called for risk-mitigation measures addressing cryptocurrency volatility before any proposed changes could advance through the agencies’ approval process.

Other mortgage companies have taken steps in the same direction. Newrez announced in January that it would begin recognizing certain cryptocurrency holdings when evaluating mortgage applications for home purchases and refinancing.

These developments suggest that crypto is gradually moving from a peripheral investment category toward an asset class that lenders may incorporate into household balance sheets.

A New Option With New Risks

The appeal of the Better-Coinbase structure is straightforward: Bitcoin holders can potentially access homeownership without immediately disposing of an appreciating asset. For borrowers with substantial BTC holdings but insufficient conventional cash for a down payment, that could provide additional financial flexibility.

The trade-off is that the strategy links a long-term housing obligation to a volatile digital asset. Although price declines alone do not trigger a margin call, significant delinquency can ultimately result in collateral liquidation.

With the median US new-home sales price around $400,000 in 2026, according to Census Bureau and HUD data compiled by the Federal Reserve Bank of St. Louis, the potential market for alternative down-payment financing is substantial. The longer-term test will be whether borrowers view Bitcoin-backed financing as a practical mortgage tool rather than simply another way to leverage crypto holdings. Adoption will likely depend on interest rates, Bitcoin volatility, underwriting standards and how lenders manage collateral during periods of market stress.